Pay transparency, once taboo, embraced by more companies, workers

Andrew Yates was among the first Buffer employees to support the push for pay transparency.

When a Web spreadsheet encouraging Google employees to list and compare their wages online began circulating at the tech giant, it was met with shock, awe and more than a little pushback from management.

And yet, years later, the spreadsheet and the movement it started live on.

Erica Baker, now an engineer at chat-software company Slack, said hardly a month goes by without someone thanking her for creating the document, an internal ledger that shortly after it was made in 2015 had spread to about 5 percent of Google’s employees.

Since then, its reach has grown. Others have added features, analyzed the numbers in new ways and, Baker said, used it to negotiate for higher wages.

“In the past you could only talk to people in your small community, and most people didn’t want to talk about how much they were making. But on the Internet … you can share ideas and information and eventually it becomes a movement,” Baker said. “We’re not at the avalanche stage in pay transparency. But people are definitely becoming more aware.”

Discussing pay remains a social and professional taboo for many. And most employers still attempt to prohibit or otherwise discourage it, even though federal law and California’s labor code expressly sanction such discussions and forbid retaliation for wage disclosures by employees.

Tech companies and startups have taken the lead in pushing what some consider a radical version of transparency, in which companies or employees make wages public either internally or for the whole world to see.

Even companies that don’t encourage the sharing of salary data are subject to having that information leak out either in the form of a spreadsheet like Baker’s, or on one of any number of websites, like Glassdoor and Payscale.com, which let current and former employees anonymously share information about culture, benefits and wages.

As technology advances and workplaces become more connected, pay transparency will probably spread.

Diversity may be another motivating factor for sharing pay figures.

Several organizations use pay transparency to address inequities in how workers are compensated. It lets them track — and others verify — whether certain groups of people, such as women, people of color and other underrepresented groups, are systematically making less than their peers.

On average, according to the Bureau of Labor Statistics, women make 79 cents to every dollar earned by men in the U.S. Among black and Latino women, that number drops to 64 cents and 55 cents, respectively.

“For women and people of color, especially women of color, knowing how your pay compares to your peers makes it easier for that person to know when they’re not being treated equitably,” said Baker, who is black and has long advocated more diversity in the technology industry. “Having that information gives that person agency, and helps them become empowered to push for changes that are good for them.”

There’s a range of ways companies can be more transparent about wages, including sharing employees’ pay internally, providing the formula an organization uses to determine compensation, and broadcasting wages online.

Buffer, a social media management company in San Francisco, has gained a reputation for taking transparency to an extreme.

The company had only a dozen people on the payroll then. So, it was easier to get buy-in than at a larger firm.

In the years since, Buffer has tracked employee earnings and tweaked its formula, which, as the company now has about 75 employees, has become more challenging.

“People trust the process, because there’s really no wiggle room when you have a clear formula,” said Andrew Yates, an iPhone-app engineer at Buffer who was one of the first employees to support the company’s push for pay transparency. “It removes a lot of office politics from pay.”

Photo: Paul Chinn, The Chronicle

Andrew Yates walks to his job for Buffer at the Galvanize shared workspace on Howard Street in San Francisco on Wednesday.

Even with a no-negotiation salary formula, on average, women at Buffer are still earning less than their male peers, the company’s most recent analysis found. But in tracking and analyzing salary information, spokeswoman Hailley Griffis said, the company has been able to determine some reasons and attempt to mitigate them.

Pay transparency still has plenty of critics.

In a highly competitive industry such as tech, there are other risks, University of Utah Professor Todd Zenger said, including the prospect that if a worker’s pay is searchable, another company could easily poach him or her by simply offering more.

“Either you have really clear measures of performance and you can be aggressive in rewarding performance and people can know that it’s being done fairly, or you can have pay transparency, but that will push you to have flatter pay,” he said. “That can be fine if you’re trying to foster a culture of cooperation and teamwork. But the consequences of that may be that the better performers are going to leave.”

So far, Buffer workers said they haven’t seen any poaching or a erosion of employee morale and camaraderie. In fact, workers said, it’s had the opposite effect.

“I don’t know how much my friends’ houses or apartments cost or how much they earn, but I know that about my colleagues because we feel very comfortable asking those questions,” Griffis said. “When how much someone earns isn’t a secret anymore, you can talk about how much they can afford to pay for an apartment or discuss financial questions openly. It’s brought us all a lot closer together.”

Money talks

Talking about wages is still taboo in many workplaces, and some employers may attempt to retaliate against workers who discuss pay openly or push for more transparency. But such attempts are likely to be illegal.

Can companies stop employees from sharing salary information?

Technically no, but that doesn’t mean they won’t try.

In 2010, according to a study by the Institute for Women’s Policy Research, nearly half of surveyed U.S. workers reported that they were either contractually forbidden or strongly discouraged from discussing pay with co-workers. (California law says companies cannot require employees to sign contracts with such clauses.)

Private-sector employees in nonsupervisory roles have the right to participate in “concerted activities for the purpose of collective bargaining or other mutual aid or protection,” according to the National Labor Relations Act. Experts widely agree that this protects employees’ right to discuss compensation.

The statutes vary by state, but most prohibit employers from requiring employees to agree to a policy of pay secrecy as a condition of employment. California’s law covers all employees and outlaws any discrimination or formal disciplinary actions taken against employees who exercise their right to discuss wages.

What can I do if my employer retaliates against me for talking about pay?

If necessary, file a complaint with the National Labor Relations Board, the Equal Employment Opportunity Commission or state agencies such as California’s Department of Labor Standards Enforcement. Those agencies may investigate the claims and take action against the employer.

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